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Last year, Lexington had sales of $742,000 and paid taxes of $66,000. Because of the...

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Finance

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Last year, Lexington had sales of $742,000 and paid taxes of $66,000. Because of the low interest rate environment, the firm also borrowed some money from the local bank and paid $43,000 in interest expense. In addition, the firm incurred Variable Costs and Fixed Costs of $290,000 and $134,000 respectively. If sales increase by 5%, what should be the increase in operating income? SET YOUR CALCULATOR TO 4 DECIMAL PLACES AND ROUND TO 2 DECIMAL PLACES AT THE END. DO NOT ENTER THE % SIGN. IF YOUR ANSWER IS 7.7011%, FOR EXAMPLE, ENTER 7.70

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